I have an online gambling site in cyprus and it has a holding company in a different country, cyprus acts as an agent and the company activities are not done in cyprus.
I have been quoted 4500 EUR for a financial audit per year, and 4800 EUR for accounting, where there will be 1 invoice per month only.
Is a financial audit required here, and am i being overcharged heavily?
Appreciate any feedback, thank you in advance!
Hey,
Either your provider is crazy expensive, or they see business case differently.
The common business case is when a foreign (in most cases Curacao) company has a gambling license, and this foreign company owns a Cypriot subsidiary. Cypriot company is acting as a payment agent for gambling company: it has an EMI account, collects payments, and might also make payments on behalf of the Curacao entity.
In such a case Cypriot company does not attribute either income or expenses in the profit and loss statement.
All these amounts are visible only in the balance sheet as money held for a third party. So Cypriot company do not attribute them to income and do not pay profit tax. It pays profit tax on cost plus or other principles.
However, most of accountants and auditors prefer to see and book the balance of every invoice they pay on behalf of the foreign company.
Even if such an invoice is not issued on behalf of Cyprus, Cyprus pays it. So if this is the case, accounting is not as easy as you might imagine.
If your foreign company is not a licensed gambling company but is pure holding mainly kept for privacy reasons and gaming activities happen in Cyprus (without a license, but I suppose with a legal opinion that you don’t need a license) then it means Cyprus is involved in the business itself, so it is hard to believe how gaming company can have one invoice per month.
I hope this helps.
